Telecoms service providers are still struggling to rebuild their balance sheets and avoid the worst consequences of overpaying for 3G licences but Finland's Nokia, which is hugely exposed to the mobile sector as a builder of mobile networks and seller of mobile phones, seems to be in robust good health.
Nokia enjoyed a relatively good 2001. It's fourth quarter earnings were expected to exceed its forecasts, with handset sales rising 20% on the previous quarter and just about matching 2000. A key to Nokia's apparent health is that since committing itself to the mobile phone world in the 1980s, its consistently high sales have generated such strong cashflow that it has been able to steer clear of issuing debt altogether in recent years.
"We still had debt back in the early 1990s," says Timo Ihamuotila, corporate treasurer at Nokia, "but our cashflow situation since then has enabled us to pay this down and it has become one of our main tactics to remain purely equity funded." Although the company has cautiously decided to maintain its debt rating of single A, it has no plans to borrow.